This study explores the interplay between regional energy policies and cross-border economic activities in the Friuli Venezia Giulia (FVG) region of Italy, with a particular focus on their impact on gasoline prices and the issue of fuel tourism. 

By analyzing weekly gasoline data through a Markov switching model, we investigate the dynamics of gasoline pricing strategies in response to regional discount policies designed to curtail cross-border fuel purchases. Our findings reveal that while these policies variably affect gasoline prices across different areas of the region, they generally result in higher net gasoline prices, especially in environments characterized by low-price and high-volatility. 

This research enhances our understanding of how local economic measures influence cross-border behaviors and evaluates the effectiveness of regional policies in stabilizing markets and mitigating economic leakages due to fuel tourism. Additionally, it underscores the necessity for a tailored policy approach that considers the unique economic dynamics of border regions.